The accountant is not ordinarily required to:

● Make any inquiries of management to assess the reliability and completeness of the

information provided;

● Assess internal controls;

● Verify any matters;

● Verify any explanations.

If the accountant becomes aware that information supplied by management is incorrect,

incomplete, or otherwise unsatisfactory, the accountant should consider performing the

above procedures and request management to provide additional information.

If management refuses to provide additional information, the accountant should withdraw

from the engagement, informing the entity of the reasons for the withdrawal.

7. The accountant should read the compiled information and consider whether it appears to

be appropriate in form and free from obvious material misstatements.

8. The accountant should obtain an acknowledgement from management of its responsibility

for the appropriate presentation of the financial information and of its approval of the

financial information.

9. The financial information compiled by the accountant should contain a reference such as

“Unaudited’, “Compiled without Audit or Review,’ or “Refer to the Compilation report’ on

each page of the financial information or on the front of the complete set of financial

statements.

Example of a report on an engagement to compile financial statements

On the basis of information provided by the management we have compiled, in accordance with the
Philippine

Standard on Related Services applicable to compilation engagements, the balance sheet of XXX
Company as of

December 31, 19XX and statements of income, changes in equity and cash flows for the year then
ended.

Management is responsible for these financial statements. We have not audited or reviewed these
financial

statements and accordingly express no assurance thereon.

THE EXAMINATION OF PROSPECTIVE FINANCIAL INFORMATION

(Based on PSAE 3400)

1. “PROSPECTIVE FINANCIAL INFORMATION” means financial information based on

assumptions about events that may occur in the future and possible actions by an entity. It

can be in the form of a forecast, a projection, or a combination of both, for example, a one

year forecast plus a five year projection.

2. A “FORECAST” means prospective financial information prepared on the basis of

assumptions as to future events which management expects to take place and the actions

management expects to take as of the date the information is prepared (best-estimate

assumptions).

3. A “PROJECTION” means prospective financial information prepared on the basis of:

55● Hypothetical assumptions about future events and management actions which are not

necessarily expected to take place, such as when some entities are in a start-up phase or are

considering a major change in the nature of operations; or

● A mixture of best-estimate and hypothetical assumptions.